Trip Cancellation Insurance
Plain English
Trip cancellation insurance pays you back for prepaid, nonrefundable trip costs if you have to cancel for a reason your policy lists, such as getting seriously sick, a death in the family or a hurricane. If your reason isn't on the list, it generally won't pay. Changing your mind isn't a covered reason.
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On this page
Definition
Trip cancellation insurance reimburses prepaid, nonrefundable travel expenses, such as airfare, hotels and tours, when the traveler can't take the trip for a reason listed in the policy. Covered reasons commonly include serious illness, injury or death of the traveler or a family member, severe weather, carrier or tour operator problems, and some legal obligations.
Why It Matters
Big trips are often paid months in advance and can't be refunded. Cancellation coverage protects that money, but only against the specific risks the policy names.
Real-World Example
Imagine a family prepays $7,000 for a vacation. A week before, a child is hospitalized. Their trip cancellation policy lists a family member's serious illness as a covered reason, so it reimburses the nonrefundable $7,000, up to the policy limit, once they send the medical records.
Common Misconceptions
- It pays if you cancel for any reason. Only listed reasons count, unless you add cancel for any reason coverage.
- It covers medical bills on the trip. That's travel medical coverage.
- It refunds costs you could get back anyway. It's for nonrefundable costs.
Key Takeaways
- Maryland: it typically covers nonrefundable prepaid costs when you can't travel because of illness or death, weather, or tour operator default.
- It pays only for reasons listed in the policy.
- Known or foreseeable events are generally excluded.
- Buy soon after booking for the fullest coverage.
Frequently Asked Questions
What is trip cancellation insurance?
Coverage that reimburses prepaid, nonrefundable trip costs if you cancel for a reason the policy lists.
What reasons does trip cancellation cover?
Commonly serious illness, injury or death of you or a family member, severe weather, carrier or tour operator problems, and jury duty. Check your policy's list.
When should I buy trip cancellation insurance?
Soon after you book; some benefits, like pre-existing condition waivers, depend on buying early.
Related Terms
Related Coverages
- Travel Insurance
Related Scenarios
Explore the rest of the Travel Insurance category.
Browse Travel Insurance terms →Sources
The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- insurance.maryland.govInsurance Tips: Travel Insurance · Maryland Insurance Administration
- disb.dc.govTaking a Trip? Information About Travel Insurance You Should Know Before You Hit the Road · District of Columbia Department of Insurance, Securities and Banking
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.